Analysts upbeat despite Compal’s net profit plunge

That is a drastic drop from the NT$6.41 billion, or NT$1.47 per share, the world’s second-largest contract notebook computer maker reported in 2012.

The company suffered a net loss of NT$2.73 billion in the third quarter of last year, its first-ever quarterly loss, mainly due to a NT$4.9 billion one-time loss associated with the divestment of its loss-making telecom subsidiary Vibo Telecom Inc (威寶).

However, the company swung into the black last quarter with net profit of NT$2.45 billion, or NT$0.57 per share, which not only helped offset the third-quarter loss, but also allowed it to remain profitable for the whole year, its financial statement shows.

“The fourth quarter of 2013 was the first quarter where Compal was free of the Vibo impact, in other words, a new start for the company,” Yuanta analyst Vincent Chen (陳豐丰) said in a client note.

Chen said the fourth-quarter result was due to sizable investment gains, including NT$400 million from selling substrate maker Simpal Electronics Co (欣寶). Also making a contribution was the company’s Chinese laptop joint venture, Lienpal Ltd (聯寶), which finally broke even in the quarter, he added.